Lower Middle Market to Provide Bright Spot in Slowing M&A Climate

Although the big picture for middle-market M&A may be dimming, there are still lots of bright spots, including the lower middle market – which we define as deals valued at between $10 million and $250 million.

Many private equity firms that focus on the lower middle market say 2015 has been a great year. In a symbol of the sector’s health, Audax Private Equity celebrated the firm’s 500th closed deal in September, when portfolio company Advanced Dermatology & Cosmetic Surgery added Dermatology of Northern Colorado.

Many of the companies that make up the lower middle market are family-owned, and family-owned businesses tend to bide their time, waiting until all the stars are aligned to ensure they get the most out of the one sale they’ll make in their lives. Family-owned businesses sense we’re coming to the end of the current economic cycle, and many will be ready to sell in the closing months of 2015 and early months of 2016.

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